The observation, made privately to visiting Secretary of State George Shultz earlier this spring, came as the Chinese leadership itself was facing a backlash from hard-liners who said it was jeopardizing political order by moving too quickly with its economic and political reforms.

``It may have been an indirect way for Deng to say, `I am moving too fast,` `` says Burton Yale Pines, research director at the Heritage Foundation, who recently spent three weeks in China.

In the wake of pro-democracy student demonstrations last December, Deng sided with the hard-liners against reform-minded Hu Yaobang, who was forced to resign as head of the 44-million-member Chinese Communist Party. The protests reinforced the fears of conservatives that Hu`s rapid timetable for political and economic liberalization risked triggering a Solidarity-type worker revolt challenging party authority.

U.S. officials believe the sudden fall of Hu, who sought to reduce the power of the party in government and the economy, sends a cautionary message to Gorbachev, who is similarly running into opposition to his proposed reforms.

To ignore it, said Kremlinologist Marshall Goldman of Wellesley College, Gorbachev would be ``a masochist.``

The world`s two Communist giants, the Soviet Union and China, are watching each other in their search for a path that will bring the benefits of economic and political liberalization without yielding too much Communist Party power.

Both are trying to deal with common challenges of modernizing a lagging economy and reviving an unresponsive political system. They are trying to adapt modern circumstances to the rigid, century-old ideology of Karl Marx, to implement incremental change without toppling the existing order, and to achieve the higher standard of living that they hope will help ensure the ultimate survival of their system.

Despite 20 years of hostility, Moscow and Beijing seem to be drawing from each other`s experience. ``There is a resonance both ways,`` said Roderick MacFarquhar, director of Harvard University`s Fairbank Center for East Asian Research.

Western experts say, for instance, that Gorbachev`s new policies are partly inspired by Chinese reforms that have produced a burst of economic growth. But that also can cut the other way, said a senior State Department official. ``When China gets into trouble, one assumes it has a backwash effect on the view of the Soviets too,`` said the official, who has visited both countries recently.

The extent to which they can succeed--and even the extent to which the leaders of both countries try--remains to be seen. But it already is clear that they are running into powerful headwinds that can slow the process, if not turn it back.

The reforms go against 35 years of ideology and practice for the Chinese; twice that for the Soviets. For that reason and others, ``there is a greater chance of success for China than for the Soviet Union,`` said Pines, of the conservative Heritage Foundation.

Western experts believe the Chinese--having enjoyed nearly a decade of strong economic growth fueled by reforms--are too far along to reverse course entirely. They see no likelihood, for instance, that China`s 800 million peasants would go along with a return to completely collectivized agriculture. The Chinese are not looking for Western-style democracy as their aim, but rather policy changes that would bring about less bureaucracy in government, a reduction of the party`s role at the lowest levels of the economy, and more power at the grass-roots level through a greater degree of economic decentralization.

The rural Chinese have seen their standard of living rise markedly as a result of reforms that reduced the role of centralized planning and freed them to sell for profit any food they produce above their official quota. Since the reforms began in 1979, China has climbed from being a net importer of food to being a net exporter, whose customers include the Soviet Union for the first time.

Chinese officials also have cited the need to reform an ``irrational pricing system`` into one that is more market-oriented, to liberalize banking, and to ease controls on workers and wages.

``The whole economic planning system is being undermined by forces that the bureaucrats don`t fully control,`` said Dwight Perkins, director of Harvard University`s Institute for International Development.

The reformists are running into opposition from the bureaucrats and their party bosses, who see their authority and power being undermined by these changes.

``Most fundamentally of all, bureaucrats don`t like to give up power,``